AUD/USD Price Analysis: Tests the H&S neckline at 0.6370, downside seems favored

• An H&S formation has accelerated the odds of a bearish reversal.
• Overall negative market sentiment has underpinned the greenback.
• Declining 20-EMA adds to the downside filters.

The AUD/USD pair has witnessed fresh demand after a nose-diving to near 0.6326 in the Tokyo session. As the risk-on profile has attempted a rebound after an intense sell-off in the risk-perceived currencies, the antipodean has displayed a pullback move to near 0.6363.

The pullback move could be short-lived as the negative risk profile has eased marginally but not faded away. Meanwhile, the US dollar index (DXY) has shifted into a sideways structure below the critical support of 112.00.

On an hourly scale, the asset has already delivered a downside break of the Head and Shoulder chart pattern that signals a bearish reversal. The aussie bulls are testing the south-side break of the chart pattern’s neckline at 0.6370. This could be a make or a break for the asset ahead.

Downward-sloping 20-period Exponential Moving Average (EMA) at 0.6377 adds to the downside filters.

Meanwhile, the Relative Strength Index (RSI) (14) is struggling to ditch the bearish range of 20.00-40.00, which indicates more downside ahead.

Going forward, a downside break of Thursday’s low at 0.6326 will drag the asset towards October 24 low at 0.6273, followed by October 21 low at 0.6210.

On the flip side, a decisive break above Wednesday’s high at 0.6493 will drive the asset toward the previous week’s high at 0.6522. A breach of the latter will send the major toward October high at 0.6548.

AUD/USD hourly chart